What keeps businesses going is cash flow. When one could not operate for weeks or months, the business becomes unsustainable. At current Covid-19 situation the magnitude is a lot worst. To conserve cash, is to close down or cut cost.
The Virus only hit US hard recently. The impact 3.3 M unemployment. This is no joke. The impact is wide spread and will bring economy down to it's knee and to be exact to a halt. USD being a trading currency has unlimited bullets. In fact the currency gets stronger during this period. It will be good opportunity for China to take this time to help America to help themselves.
Not surprisingly or thankfully Singapore has reserve exactly or unfortunately for such situation that can help us. Once a business collapsed, to recover will be hard, and basically "V-Shape Recovery" is impossible.
The Singapore budget proposed $48B on top of $6.4B to support the economy. That's about $19.4 K each for 2.8M workers in Singapore. Basically the government is feeding each worker $2160 monthly for 9 months ! which reduced their chances of being retrenched largely and keep most businesses afloat.
Recession is the last thing in our mind. What we are facing is a total collapse. With this budget support, there is good chance the Virus will be stopped way before the year ended. I have faith we will get through this even stronger while many nations without strong reserve will be lagged behind. And the only practical option for them is to print through inflation. This will be ugly.
Personally I feel that the Vaccine will be rushed through so if there is a breakthrough within 2 months the sky would change suddenly. I would stay invested and buy slowly into the market. It will be a game changer for the world after all this is ended. As I sold a few positions last week, warchest is filled back up again with some trading profits. Don't get me wrong, I have dividend goal in mind. -14.6% YTD.
Cory
2020-0329
